GamesBeat

Candy Crush Saga publisher King getting pummeled by market after weak Q2

Above: Bubble Witch Saga 2 isn't enough for King.

Image Credit: King

The company responsible for one of the biggest mobile games in the world is crashing on the stock market.

King, the publisher of popular smartphone and social games like Candy Crush Saga, is down nearly 25 percent in after-hours trading today on the New York Stock Exchange. The company’s stock is currently at $14.20, which is down from $18.20 when the market closed earlier this afternoon. This huge fall is due to a big miss in its quarterly report. While gamers spent $16 billion on mobile games last year, and King captures a huge chunk of that, much of the company’s value comes from just a few games. If the company can’t maintain its revenues with those hits, it reduces investor confidence that it can do it with any of its upcoming releases either.

This represents a new low for King’s stock price, which debuted in March in an initial public offering at $22.50. It has only briefly reached that price again in July.

Analysts were expecting the mobile megapublisher to bring in revenues of $608 million, but the company only generated $594 million for the three months ending June 30. This is despite launching a successful new game, puzzler Bubble Witch Saga 2, during that period. Likely, investors are taking this as confirmation that King will struggle to find a successor to the revenue magnet Candy Crush Saga.

On those revenues, King managed to earn 59 cents per share and a profit of $165 million during the quarter.

But the company is bleeding monthly unique payers, or the number of individuals making purchases in King’s free-to-play games. That figure is down 12 percent compared to the first quarter of 2014 to 10.4 million. King also lost 5 million daily active users from the first quarter. That’s a troubling sign, and it is one even King is recognizing.

The company revealed it is cutting its expectations for 2014 — although King claims that isn’t a big deal.

“While our second quarter gross bookings came in below our expectations leading us to reduce our outlook for full-year 2014 growth rates, from a profitability perspective, the business continued to perform well,” King chief executive Riccardo Zacconi said in a statement.

The company expects revenues of $2.25 billion to $2.35 billion for its entire fiscal 2014, which ends Dec. 31.

In a potential effort to pacify investors, Zacconi announced a $150 million dividend program, which will award cash to stock holders.

Finally, King also revealed plans to acquire Singapore studio Nonstop Games for $6 million in cash. The company may owe another $84 million to Nonstop’s owners depending on the performance of its games under King. Nonstop is responsible for mobile strategy games like Heroes of Honor, and this acquisition will diversify King’s offerings.

More information:

King.com, the largest skill gaming site in the world, where you can play free games online in competitive tournaments in categories such as puzzle, strategy, word, action, card and sports games. King.com was founded in 2003 with the... read more »

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14 comments
James Clarke
James Clarke

C'mon. It was a smash and grab IPO. Well done on getting lucky. 100 million to 1 on being lucky again.

Jason Allenberg
Jason Allenberg

Sure it's newsworthy, with King's position and revenues.

Sixty Hertz
Sixty Hertz

Analysts were expecting the mobile megapublisher to bring in revenues of $608 million, but the company only generated $594 million for the three months ending June 30"

Isn't that a like a 1% difference????  That would seem to be pretty accurate prediction but i have no clue how the stock market's logic works... lord knows i've tried...


Wendy Sue Buckleman
Wendy Sue Buckleman

"They are putting new wrappers on the same old Touch Script subroutines floating around in Open Source," I've been just saying, to my 9 year old, about this company and so many others. Then added, "Your generation will be about writing totally new ways to do original physical things in games."

David Hollaway
David Hollaway

??"While gamers spent $16 million on mobile games last year"???>

Jason Bender
Jason Bender

"While gamers spent $16 million on mobile games last year, and King captures a huge chunk of that, much of the company’s value comes from just a few games." 


I think you mean $16 BILLION. 


Sixty Hertz
Sixty Hertz

except they've been around for 10+ years... 

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